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5 Essential Tips For Saving During An Emergency
Emergencies come at inconvenient times, and we should be ready to weather them. And when those emergencies come, we can find ourselves struggling to save.
Whether it is COVID-19 or any other emergency, follow these essential tips for saving during a crisis.
Have An Initial Emergency Fund
To start, you should have an initial emergency fund with up to have a year of expenses of emergency funds. These funds are to be strictly used for emergencies such as medical bills, home repair, car repairs, and other cases when you need money fast.
Avoid High-Interest Payment Plans & Credit Cards
To save during an emergency, it is wise to avoid high-interest payment plans and credit cards. These will cause you to pay more than you usually would over time. If you must get a payment plan or credit card during an emergency, research your options and choose those with lower interest rates. Your financial advisor will be able to help.
Rework Your Budget
Rework your budget during an emergency to cut out unnecessary expenses like eating out and making trips. Make a list of all of your expenses and income, including monthly debts, payments, and non-essentials like eating out. You may have to tighten your belt during an emergency, but it will be worth the effort to get through it.
Put Any Extra Money You Receive Into Emergency Savings
If you are one of the millions of Americans who received a stimulus check during COVID-19, put most, if not all, of that money into savings. That extra money will give you a boost in savings to draw from in case of an emergency. One of the easiest ways to save is to have a portion of your income automatically transfer to a savings account when it is deposited into your account.
Setting up a high-yield interest online savings account is also a great way to get the most out of your savings. High-interest rates mean you can earn money faster. Just remember that you will be waiting longer for those funds to be available to you after you make a deposit.
Talk To Your Lenders For Breaks
Many lenders are temporarily suspending payments during this time, giving you the chance to put that money into your emergency savings. Talk to your lenders about temporarily suspending monthly payments, especially if you cannot afford them at this time or are behind. Your lender will work with you to find the best option. If you have lost your job, you should look into job loss mortgage insurance.